By: The Next Step Magazine                                            Back to NextStep Resource Center
This article is provided by The Next Step Magazine, a publication that helps students prepare for life after high school. Visit them at www.nextSTEPmag.com

How to Read (and React to) Your Financial Aid

By Gen and Kelly Tanabe

Receiving a letter with those words is the goal of every scholarship seeker. When you receive such a letter, you might think that all you have left to do is pack your bags and move into the dorm. But the truth is that, even after you receive a scholarship or financial aid award, you still have a few crucial finishing touches to complete. If you don’t, you may face delays in getting the money, or even worse, find that you have a shortfall in funds.

Here’s what you need to know to make the transition between getting that award letter and putting the money toward your tuition.

Scholarship etiquette and cashing the check
Before getting to work, you should give yourself a pat on the back for winning a scholarship. There is no better way to pay for college than with free money that you don’t need to pay back!

Though the most difficult part is over—you probably spent countless hours completing the applications, writing essays and getting recommendations—there are still a few important finishing touches to make.

First, understand how you will receive the funds. Will the scholarship organization provide the check to your college or directly to you? You want to make sure that the check is sent to the right place. It’s also important to know how you can spend the scholarship. Depending on the scholarship, you may be able to use the funds to pay for room and board, textbooks or even a computer.

After you’ve received the award, make Miss. Manners proud by writing a thank-you note to the organization. Not only will you reinforce that you are a gracious recipient, but you will also help ensure that the organization continues to give the award in the future. The judges want to know that their efforts are making a difference to students like you.

Lastly, you’ve made the effort to win the award. If it is renewable, it only takes a little bit more effort to keep it year after year. To keep the award, you may need to maintain a minimum GPA or provide proof of enrollment. Make sure that you give the scholarship organization everything that it needs to keep the checks coming.
 

From award letter to the bank
After your parents have crunched the numbers, totaled their assets and helped you fill out the financial aid forms, the result of their efforts will be a financial aid award letter. This letter outlines how much and what kind of aid you will be offered.

The key word is “offered.” You don’t need to accept everything that you are offered. You may receive grants, loans or work-study. Because you don’t have to repay grants, you will definitely want to accept them. Depending on other job opportunities, you may want to seek a job on your own or accept work-study, which provides a federally subsidized on-campus job. And you’re likely to be offered a variety of loans.

Because there are different types of loans, it’s important to consider which type of loan to take and how much to borrow. Ask yourself: How much do you actually need to borrow? What is the interest rate that you will be charged? Is the loan subsidized so that you don’t need to pay interest on the principle until after you graduate? How long will it take to repay your loan after graduating, and what will the payments be? Can you reduce the interest rate by making a series of on-time payments?

Once you’ve decided how much you need to borrow and through which loans, you will need to sign a promissory note with your lender. By doing this, you are promising to repay the loan.

Even after receiving their financial aid award letters, some students find that the aid they are offered is not enough. This is the time to speak up and ask for more. This is especially true if something has changed in your family’s situation.

For example, let the college know if one of your parents has become unemployed or has had a reduction in income, if there are changes in medical, educational or care giving expenses or if you have any other major financial changes. Ask the college for a reassessment of your financial aid package. If your changes are significant enough and the college has the funds, you may get more help.

As you can see, there are some final steps to take to make sure the money you’ve won gets to the bank. These are not difficult steps, but they will ensure that you have the money when you need it. And now, you’re ready to pack those bags to head off to school!